Rent control expansion in California was soundly defeated by voters who declined to repeal a 23-year-old law that limits cities’ ability to enact rent control, giving an election-day win for landlords.
Voters declined to repeal the Costa-Hawkins Rental Housing Act of 1995 which prohibits cities from applying rent control to housing built after Feb. 1, 1995 and to single-family homes and condominiums.
“The stunning margin of victory shows California voters clearly understood the negative impacts Prop. 10 would have on the availability of affordable and middle-class housing in our state,” said Californians for Responsible Housing, the group opposing the measure, in a statement late Tuesday.
The current law allows landlords of rent-controlled properties to raise the rent when tenants move out. In addition to expanding the types of properties that would fall under rent control, Prop. 10 would have let cities permanently cap the price of an apartment, allowing only modest increases even after tenants move out.
The Los Angeles County Board of Supervisors, the state’s largest county governing body, came out in support of Prop. 10, as have prominent politicians like Los Angeles Mayor Eric Garcetti, who see the issue as one in which they should have more authority, according to governing.com.
“I’ve always believed that those who live closest to a given block or a street know what’s best,” he told the local NBC News station. “Local government should have control over their own city.”
The state’s Democratic Party endorsed the measure, but not Democratic Governor-elect Gavin Newsom.
“Getting rid of these protections overall may have unintended consequences on housing construction and production that could be profoundly problematic,” Newsom said at a California housing conference in March.
He and other opponents of the measure say repealing the law would have taken away the incentive for developers to build, lessen the supply of available housing and drive rents up in properties not under rent control.
According to a recent Stanford University study, rent control in San Francisco has saved tenants in rent-controlled units between $2,300 and $6,600 since 1995 but simultaneously reduced the overall number of rental units on the market, driven overall prices up and worsened the affordability crisis.
The California Association of Realtors has contributed $6.5 million in opposition to the ballot initiative. The AIDS Healthcare Foundation, which says the affordable housing crisis falls heavily on the clients they serve, has pumped more than $22 million in support of it, according to governing.com.